How These College Friends Grew An Interactive Quiz Maker To $3M ARR

Josh Haynam and Matthew Clark

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Published: July 30th, 2022

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Josh Haynam and Matthew Clark

Founder, Interact

$208K

revenue/mo

Founders

Employees

Interact

tryinteract.com

from San Francisco, CA, USA

started January 2014

$208,333

revenue/mo

Founders

Employees

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Hello! Who are you and what business did you start?

I’m Josh Haynam, co-founder/CEO of interact, and I’m not a tech person. What brings me joy in life is human connection and being in nature. The company that my friends and I started in college doesn’t help with the nature part, but we do facilitate human connection through interactive quizzes.

The quizzes built on interact allow people to have a brief conversation so the brand can figure out how to be most helpful to the customer and the customer can have the best-personalized experience possible.

Over the last 10 years of bootstrapping the company we’ve built it to nearly $3 million in ARR and over 100 million people take interact quizzes every year.

Image from Henry’s House of Coffee

What's your backstory and how did you come up with the idea?

I’ve always been an entrepreneur. My first business was started at age 15, buying and selling used electronics to make money during the worst financial crisis of our lifetimes in 2008.

What I realized is that you can make money and also enjoy what you’re doing, even in the most turbulent of times, and that was amazing.

Interact started as a random idea in a hot tub with my co-founders, we had worked on projects together in college and the quiz idea was just kind of thrown out there when there were no other platforms for making quizzes.

The idea of starting something that no one had done before was very intriguing so we decided to give it a shot.

It took a very very long time for the idea to catch on, the first 6 years of the company we didn’t make a lot of money, just barely scraping by, and I lived in what was technically a closet turned into a room.

We held onto the idea of what we were doing because the customers who were using our product saw what it could do and were facilitating real human connection through their quizzes, we believed in that and kept going.

You can go faster alone, further together. On your own, you can sprint, run through walls, and get stuff shipped. But you’ll reach your limit.

Take us through the process of designing your first product.

Our design and build process is very relational and methodical. It starts with talking to customers and turning qualitative research into quantitative data. That means talking to enough customers until you get a critical mass from which you can make data-driven decisions about what to build.

Being in a brand new market, any given company that was considering using our product would have 5-10 requests for new features. Being bootstrapped we couldn’t afford to make all of those features, and when we tried that went not great.

Instead what I would do is talk to 30 customers and draw connections between what the most people were asking for, then build that. Doing it this way led to much more success and product growth in the long term.

We built the initial product using that method and still use it today.

Describe the process of launching the business.

We launched the product in a very methodical manner, testing out each phase. In retrospect it’s very clean and tidy, at the time it was stressful because we had a countdown timer for when we’d graduate college and needed to start making money before our graduation date.

Phase 1: Upwork. Called Elance at the time, we would seek people out who wanted quizzes built, they would pay very little and have high demands, we lost money on that method.

Phase 2: Direct outreach. We would sell the product directly to customers, we got a few this way but back then it was very easy to generate leads since there were no rules in place for emailing random people so we didn’t do well with that.

Phase 3: Quiz tutorials. We started putting out quiz tutorials on how to create different types of quizzes, some momentum was building around the concept and we were the first ones to create this type of content so it caught on and got us 100 paying customers.

We monetize the product through recurring subscriptions based on volume and features. To come up with a pricing strategy we analyze what customers need, then correlate it back to the time/effort it takes our team to build those feature sets to finalize which sets of functionalities are available on each subscription plan.

Since launch, what has worked to attract and retain customers?

At interact, we have three main pillars of growth.

1) Content: We create two main types of content. Blog post/YouTube/Podcast tutorials where we talk people through a specific topic related to a quiz. And quiz templates that give people an exact template they can follow/copy into their account to create their quizzes.

2) Affiliate partnerships. We have relationships with thousands of creators and service providers who act as affiliates for interact, but also are just partners for us and help us understand the market/what is needed. Our partners write content about interact and create videos + podcasts as well, all centered around creating quizzes.

3) Webinars. We host webinars with our Chief Evangelist, Chanti Zak who is the world’s leading expert on quiz strategy. We invite customers, potential customers, and the audiences of our affiliates to these sessions.

Partner with your customers. You are not at odds because they’re paying you, listen to what they’re saying, whether it’s good or bad, and use that to learn.

How are you doing today and what does the future look like?

All of our business is inbound at this point so we don’t spend on things like ads or anything like that.

Revenue over the last three years has been growing steadily around 30% year over year on average, the pandemic messed with the timing of growth but in aggregate that’s what we’ve been seeing.

Almost all of our cost is our investment in people who are on the team, so the gross margin is very high and we operate super lean with a profit margin of around 10% each year.

Through starting the business, have you learned anything particularly helpful or advantageous?

There is no magical bliss when you reach a certain level of success. With each phase, there are new challenges and problems to solve. However, the beauty and the freedom of being able to solve those problems creatively and in line with your values is what makes starting a company great in my opinion.

Good things take time to develop. We’ve often fallen into the trap of thinking that it would just be a few more months to get a new initiative going or to reach the next phase of growth. Sometimes things do snap into place quickly, but only after lots of methodical building.

You can go faster alone, further together. On your own, you can sprint, run through walls, and get stuff shipped. But you’ll reach your limit. With a team of people who can pick each other up, bring in different skill sets and perspectives, and collaborate effectively, you can go much further and unlock new growth that you would not see on your own.

What platform/tools do you use for your business?

CRM: HubSpot
Stock Images: Death to Stock
Affiliate Management: Partnerstack
Webinars: Zoom

What have been the most influential books, podcasts, or other resources?

Podcasts:

Advice for other entrepreneurs who want to get started or are just starting out?

Here’s my overly prescriptive advice for starting a company.

Sell the idea/product all the time. Talk to people who you think might use your solution before it exists, while you’re building it after it’s launched. No idea is worth anything unless someone wants to buy it.
Learn as you grow. Sell the product, implement it, and watch it how helps the customer (or doesn’t) don’t be afraid to have your solution not work because that’s where you’ll learn.
Partner with your customers. You are not at odds because they’re paying you, listen to what they’re saying, whether it’s good or bad, and use that to learn.
Be open to your idea not working. Sometimes the best solutions come because you got started on one thing and then saw another opportunity open up.

Are you looking to hire for certain positions right now?

Interact is hiring engineers to help build the next generation of the product. We’ve spent 10 years crafting the perfect model of what makes a quiz convert well for lead generation and product sales through conversation, and now we want to take the quiz strategy to more industries.

To do that we need to build specific solutions for each industry we serve, while also scaling to the over 100 million quiz takers who use interact quizzes each year.

If you’re looking to help build a product used by millions while also getting exposure to the inner workings of a multi-million ARR startup, reach out to me on Linkedin.